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UNIVERSITY  OF  ILLINOIS 

Agricultural  Experiment  Station 


BULLETIN  No.  261 


ECONOMIC  FACTORS  IN  CATTLE  FEEDING 

CATTLE   FEEDING   IN  RELATION 
TO   FARM  MANAGEMENT 

BY  H.  C.  M.  CASE  AND  K.  H.  MYERS 


URBANA,  ILLINOIS,  MARCH,  1925 


FOREWORD 

The  Animal  Husbandry  Department,  in  1912,  began  the  publica- 
tion of  a  series  of  circulars  on  "Economic  Factors  in  Cattle  Feeding." 
By  1914  four  circulars  had  been  published,  namely: 

No.  163  Relation  of  the  United  States  to  the  World's  Beef  Supply 

No.  164  Argentina  as  a  Factor  in  International  Beef  Trade 

No.  169  A  Review  of  Beef  Production  in  the  United  States 

No.  175  Cattle  Feeding  Conditions  in  the  Corn  Belt 

It  was  planned  that  the  final  number  of  the  series  would  be  devoted  to 
cattle  feeding  in  its  relation  to  farm  management  and  soil  fertility. 

In  19J_2  the  department  began  detail  cost-of-production  studies  un- 
der the  direction  of  Professor  H.  W.  Mumford,  then  head  of  the  depart- 
ment and  the  senior  author  of  the  above  mentioned  circulars.  Professor 
W.  F.  Handschin,  as  a  member  of  the  department,  was  given  immediate 
charge  oT  the  work  and  continued  with  this  responsibility  after  he  was 
made  head  of  the  Department  of  Farm  Organization  and  Management" 
in  1917. 

These  investigations,  initiated  by  the  Department  of  Animal  Hus- 
bandry and  continued  by  the  Department  of  Farm  Organization  and 
Management,  are  the  basis  of  the  present  publication.  The  analysis  of 
the  data  and  its  interpretation  in  this  publication  have  been  the  contri- 
bution of  the  authors. 


SUMMARY 

The  detailed  cost-of-production  studies  reported  herein  were  car- 
ried on  in  Hancock  county  during  the  ten-year  period  1913-1922  and 
include  data  on  1,558  steers  fed  in  thirty-eight  lots. 

The  average  profit  per  steer,  after  allowing  credit  for  the  pork  and 
manure  produced,  was  $2.07.  However,  the  results  of  the  enterprise 
varied  widely  on  the  different  farms — from  a  profit  of  $12.60  a  steer  to  a 
loss  of  $14.50.  The  cost  of  gains  also  varied  widely,  being  more  than 
twice  as  high  on  some  farms  as  on  others  during  the  same  year,  and 
about  20  percent  higher  for  cattle  weighing  above  1,000  pounds  when 
put  on  feed  than  for  cattle  weighing  less  than  800  pounds. 

Feed  made  up  an  average  of  85.5  percent  of  the  total  feed-lot  cost 
of  fattening  the  cattle;  man  labor,  4.10  percent;  horse  labor,  1.81  per- 
cent; general  farm  expense,  2.90  percent;  interest,  4  percent;  building 
expense,  .82  percent;  miscellaneous,  .21  percent;  and  death  risk,  .66 
percent. 

In  cost  accounting  work,  the  cattle  are  charged  with  some  items 
that  may  not  constitute  an  actual  cost  on  a  particular  farm.  For  ex- 
ample, they  arc  charged  with  roughage,  which  is  not  usually  sold  from 
some  farms  and  for  which  there  is  little  demand.  They  are  charged 
with  man  and  horse  labor  used  at  seasons  when  other  enterprises  do 
not  provide  full  employment.  They  also  may  help  to  carry  a  part  of  the 
overhead  expense  of  the  farm  which  would  be  incurred  regardless  of 
what  enterprises  were  carried  on.  In  attempting  to  show  the  value  of  the 
enterprise  to  the  farm  as  a  whole,  however,  some  of  these  items  may 
be  differently  assigned,  and  the  showing  of  profit  from  the  enterprise  cor- 
respondingly changed.  Cost  accounts  kept  for  a  seven-year  period  on  one 
of  the  farms  included  in  this  study  showed  a  direct  net  profit  of  $290.65 
a  year  for  an  average  of  56.4  steers  fed  annually;  but  when  the  enter- 
prise was  analyzed  from  the  standpoint  of  the  farm  as  a  whole,  it  was 
found  that  it  added  a  total  of  $827.65  annually  to  the  net  income  of  the 
operator. 

The  economic  relationship  of  any  farm  enterprise  to  the  remainder 
of  the  farm  business  is  quite  as  important  as  the  study  of  the  efficiency 
of  the  separate  enterprise.  Since  the  cattle-feeding  enterprise  does  not 
directly  require  much  land,  it  can  be  added  to  the  farm  business  in  an 
area  producing  surplus  corn  without  displacing  some  other  enterprise 
either  wholly  or  in  part.  This  adds  volume  to  the  farm  business  without 
requiring  increased  acreage;  which  fact  is  an  important  one  in  a  sec- 
tion where  land  makes  up  such  a  large  part  of  the  total  farm  investment 
as  it  does  in  Illinois. 


FIG.  1. — DISTRIBUTION  OF  BEEF  CATTLE  IN  ILLINOIS 

Hancock  county,  in  which  these  studies  were  made,  is  in 
the  principal  beef-producing  area  of  the  state.  On  the  basis 
of  land  area,  this  county  finishes  for  market  about  twice  its 
proportion  of  fat  steers  compared  with  the  state  as  a  whole. 


CATTLE   FEEDING   IN  RELATION 
TO   FARM   MANAGEMENT 

By  H.  C.  M.  CASE,  Assistant  Chief  in  Farm  Organization  and  Management, 
and  K.  H.  MYERS,  Assistant  in  Farm  Organization  and  Management 

The  place  of  beef-cattle  feeding  in  the  organization  of  farms  thruout 
a  large  part  of  the  corn  belt  has  stood  the  test  of  time.  Since  it  is  a 
well-established  farm  practice  it  is  evident  that  the  enterprise  either  now 
has  or  has  had  a  place  in  profitable  farming.  Many  farmers  consider, 
however,  that  little  direct  profit  is  realized  from  feeding  beef  cattle. 
While  this  may  be  true,  the  fact  that  the  enterprise  is  retained  as  a 
regular  farm  practice  by  so  many  corn-belt  farmers  may  be  taken  to 
indicate  that  either  directly  or  indirectly,  it  contributes  materially  to 
the  more  efficient  organization  and  operation  of  their  farms. 

The  purpose  of  this  bulletin  is  to  show  as  accurately  as  possible, 
by  an  analysis  of  records  collected  over  a  period  of  ten  years  in  the 
principal  cattle-feeding  section  of  Illinois,  (1)  the  costs  that  enter  into 
the  cattle-feeding  enterprise  and  the  financial  results,  and  (2)  the  place 
that  cattle  feeding  fills  in  the  organization  and  operation  of  corn-belt 
farms. 

Studies  on  which  this  publication  is  based  were  made  in  Hancock 
county  during  the  ten-year  period  1913-1922.  This. county  is  in  west- 
central  Illinois  bordering  on  the  Mississippi  river  and  is  in  an  area 
generally  recognized  as  the  principal  beef-cattle  and  hog-producing 
section  of  the  state  (Fig.  1).  Corn  makes  up  over  40  percent  of  the 
total  cereal  acreage;  wheat  and  oats  together  comprize  about  an  equal 
area.  The  farmers  of  this  county  produce  yearly  an  average  of  2,500 
bushels  of  corn  per  farm  and  as  a  rule  sell  only  about  25  percent;  much 
of  the  corn  that  is  sold  is  fed  by  other  farmers  in  the  county.  The  soil 
is  well  above  the  average  of  the  state  in  productivity. 

On  the  basis  of  land  area,  Hancock  county  finishes  for  market 
about  twice  its  proportion  of  fat  steers  and  hogs  compared  with  the 
state  as  a  whole.  An  average  number  of  sheep  and  poultry  are  raised, 
but  the  county  has  less  than  two-thirds  of  its  proportionate  share  of 
dairy  cows,  according  to  the  1919  Census.  These  conditions  are  char- 
acteristic of  the  counties  lying  between  the  Illinois  and  Mississippi 
rivers  and  indicate  in  a  general  way  the  wide  difference  between  the 
type  of  farming  in  this  area  and  that  found  in  other  parts  of  the  state. 
The  section  of  Hancock  county  in  which  the  greater  part  of  the  cost- 
accounting  investigations  were  conducted  is  a  more  specialized  beef- 
cattle  and  hog-producing  community  than  the  county  as  a  whole. 

217 


218  BULLETIN  No.  261  [March, 

The  usual  practice  in  this  area  is  to  purchase  feeder  cattle  at  some 
western  point  and  put  them  directly  into  the  feed  lot.  An  occasional 
cooperator  bought  stocker  cattle,  which  were  run  on  pasture  before 
they  were  placed  in  the  feed  lot,  or  raised  a  few  calves  which  were  put 
into  the  feed  lot. 

Feeders  which  were  purchased  as  stockers  or  raised  and  fed  on  the 
sam,e  farm  were  valued,  when  placed  in  the  feed  lot,  at  the  price  at 
which  it  was  believed  they  would  have  sold  locally  as  feeders.  This 
publication,  however,  is  concerned  chiefly  with  the  analysis  of  the  feed- 
lot  phase  of  the  beef-cattle  enterprise  and  the  relation  of  the  enterprise 
to  the  entire  farm  business,  and  not  with  the  buying  and  breeding  of 
cattle. 

During  the  ten-year  period,  1,558  cattle  were  finished  for  market. 
This  number  was  made  up  of  thirty-eight  lots  ranging  from  13  to  85 
head  to  a  lot  and  representing  an  average  of  41  head  fed  each  year  on 
each  farm. 

In  order  to  study  the  records  more  conveniently,  the  cattle  are 
divided  into  groups  according  to  their  initial  weights.  Since  the  feeding 
period  was  longer  for  light-weight  cattle  than  for  heavier  animals,  the 
method  of  grouping  also  brings  together  the  cattle  fed  for  similar  periods. 

No  attempt  is  made  to  group  the  cattle  according  to  quality.  While 
there  naturally  were  some  variations  on  the  different  farms  and  in  dif- 
ferent years,  practically  no  cattle  of  the  poorer  grades  and  relatively 
few  of  the  best  grade  were  included. 

More  cattle  were  fed  in  the  early  years  of  the  study  than  in  the 
later,  but  cattle  of  each  of  the  different  weights  made  up  about  the  same 
proportion  of  all  cattle  fed  each  year.  Differences  in  profits  from  cattle 
of  different  weights  must  have  been  due,  therefore,  on  the  whole,  not 


NOTE. — In  gathering  the  facts  on  which  this  publication  is  based,  eight  to  twelve 
farmers  operating  typical  Hancock  county  farms  cooperated  with  the  Station  each  year, 
keeping  detailed  records  of  the  cost  of  all  farm  products  and  the  profit  or  loss  realized 
from  each  productive  enterprise. 

A  representative  of  the  Experiment  Station  visited  each  farm  two  to  four  times 
a  month  to  collect  and  check  the  daily  labor  and  feed  records  and  cash  receipts  and 
expenditures  kept  by  the  cooperators.  Careful  records  of  crops  produced  and  inventories 
of  crops  on  hand  were  also  kept  and  sent  to  the  Station  each  month  for  record  and 
analysis. 

The  object  of  these  studies  has  been  to  determine  the  conditions  which  make 
for  more  profitable  systems  of  farming  in  different  parts  of  the  state.  The  data  secured 
are  valuable  for  this  purpose  because  the  averages  of  records  kept  over  a  number  of 
years  round  off  the  fluctuations  due  to  seasonal  conditions  and  changes  in  price  levels, 
and  give  results  representing  average  conditions.  Also,  since  these  studies  include  a 
record  of  all  parts  of  the  farm  business,  it  is  possible  to  show  more  accurately  the  rela- 
tion of  any  single  enterprise,  like  beef-cattle  feeding,  to  the  rest  of  the  farm  business, 
as  well  as  to  show  how  the  enterprise  may  be  conducted  more  economically.  Such  an 
analysis  should  help  farmers  to  arrange  their  business  to  meet  changing  economic 
conditions. 


1925] 


CATTLE  FEEDING  AND  FARM  MANAGEMENT 


219 


to  the  favoring  of  a  particular  weight  in  years  when  that  weight  com- 
manded a  premium  on  the  market,  but  to  other  causes  which  are  dis- 
cussed later. 

PART  I— THE  COST  OF  PRODUCING  BEEF 

A  combined  financial  statement  for  the  1,558  steers  and  the  average 
financial  statement  per  steer  are  given  in  Table  1.  The  total  costs  of 
feeding  cattle  are  divided  into  three  groups:  the  initial  cost  of  the  cattle, 
the  operating  or  feed-lot  costs,  and  marketing  charges.  The  total  cost 
less  the  estimated  value  of  the  manure  produced  and  of  the  gain  in  the 
weight  of  hogs  which  followed  the  cattle,  represents  the  net  cost. 

The  average  results  per  steer,  as  shown  by  Table  1,  were  as  follows: 

1.  The  average  steer  put  into  the  feed  lot  at  a  weight  of  894.2 
pounds  cost  $68.30. 

2.  The  cost  of  putting  on  273.7  pounds  of  gain  was  $52.83. 

3.  The  marketing  charges  were  $2.87  per  steer. 

4.  The  finished  steer,  weighing  1,167.9  pounds,  represented  a  total 
cost  of  $124. 

TABLE  1. — RESULTS  OF  TEN  YEARS  OF  CATTLE  FEEDING  IN  HANCOCK. 
COUNTY,  ILLINOIS,  1913-1922 


Total  of  1,558  steers 

Per  steer 

Average  length  of  feeding  period 

186.  8  days 

186.  8  days 

Initial  weight  of  steers  (Ibs.)  .  .  . 
Total  gain  (Ibs.)  

1  393  060 
426  449 
1  819  509 

894.2 

273.7 
1  167.9 

Final  weight  (Ibs.)  .               .  . 

Initial  cost  

$106  387.74 

$68.30 

Operating  costs  in  feed  lot  
Feed  

$70  375.84 
3  378.27 
1  474.41 
2  395.07 
3  298.70 
669.80 
175.75 
548.49 

$  82  316.33 

$45.17 
2.17 
.94 
1.54 
2.12 
.43 
.11 
.35 

$52.83 

Man  labor  

Horse  labor  

General  farm  expense  

Interest  charges  

Buildings  and  equipment.  .  .  . 
Miscellaneous  

Death  risk  

Marketing  expense     .   .        . 

$    4  477.99 

$    2.87 

Total  cost  at  date  of  selling.  .  .  . 

$193  182.06 

$124.00 

Total  credit  

$  9  141.33 
9  810.50 

$  18  951.83 

$  5.87 
6.30 

$  12.17 

Manure  credit  (75c  a  ton)  .  .  . 
Pork  credit  (l^lb.  per  bushel 
of  corn  fed)  

Net  cost  

$174  230.23 
177  480.95 

$    3  250.72 

$111.83 
113.90 

$    2.07 

Sale  price  

Profit  

NOTE. — The  number  of  cattle  fed  and  marketed  during  the  different  years  was  as 
follows:  1913,  324;  1914,  311;  1915,  160;  1916,  99;  1917,  73;  1918,  169;  1919,  165; 
1920,  0;  1921,  82;  1922,  175. 


220  BULLETIN  No.  261  {March, 

5.  The  net  selling  price  per  steer  was  $113.90.,  leaving  a  deficit 
of  $10.10. 

6.  Manure  gave  a  credit  of  $5.87  per  steer  when  valued  at  75  cents 
a  ton.   Pork  gave  a  credit  of  $6.30  per  steer  at  current  prices  for  pork, 
the  gain  in  weight  by  the  pigs  being  estimated  as  1%  pounds  for  each 
bushel  of  corn  fed  to  the  cattle. 

7.  The  net  profit  after  allowing  the  above  credit  of  $12.17  for 
by-products  was  $2.07  per  steer.   However,  as  shown  later  (Table  5), 
the  results  on  the  different  farms  varied 'from  a  profit  of  $12.60  per 
steer  to  a  loss  of  $14.50,  in  the  same  year. 

Some  cattle  were  fed  on  the  cooperating  farms  each  winter  except 
the  winter  of  1919-20.  The  enterprise  for  the  ten-year  period  probably 
would  have  shown  a  loss  had  the  cattle  feeders  in  this  area  fed  the  usual 
number  of  steers  that  year,  for  at  that  time  cattle  feeding  in  general  was 
an  unprofitable  enterprise  owing  to  the  high  prices  of  feeder  cattle  and 
feed  and  a  declining  market  when  many  fat  cattle  were  sold. 

How  THE  DIFFERENT  ITEMS  OF  COST  WERE  DETERMINED 

1.  Cost  of  Feed. — This  was  determined  for  each  month  at  farm 
prices;  that  is,  in  the  case  of  home-grown  feeds  the  cost  charged  to  the 
steers  was  the  local  market  price  less  the  cost  of  hauling  to  market,  and 
in  the  case  of  purchased  feed  it  was  the  local  market  price  plus  the  cost 
of  hauling  to  the  farm.    Roughages  were  valued  at  conservative  prices 
whether  or  not  it  was  customary  to  sell  such  roughages  from  the  farm. 
As  a  check  on  the  daily  feed  record  kept  by  the  farmer,  the  feeds  on 
hand  were  carefully  measured  each  month. 

2.  Man  Labor. — The  rate  per  hour  for  all  hired  labor  was  deter- 
mined by  dividing  the  total  labor  cost  for  the  month  by  the  hours  of 
labor  performed  by  hired  help  during  the  month.   The  labor  of  mem- 
bers of  the  family  not  paid  a  definite  wage  was  charged  at  the  average 
monthly  rate  of  hired  labor  on  all  the  cooperating  farms.   The  amount 
of  labor  spent  in  caring  for  cattle  was  recorded  daily  by  the  cooperator 
and  checked  by  the  route  man  on  his  visits  to  the  farm. 

3.  Horse  Labor. — The  cost  of  horse  labor  per  hour  was  determined 
by  dividing  the  total  cost  of  keeping  horses  for  the  entire  year  by  the 
number  of  hour's  of  horse  labor  performed  on  the  farm  during  the  year. 
The  cattle-feeding  enterprise  was  then  charged  with  the  number  of 
hours  devoted  to  it. 

4.  General  Farm  Expense. — There  are  always  expenses  incurred 
in  the  operation  of  the  farm  that  cannot  be  charged  directly  to  any  one 
farm  enterprise  but  must  be  shared  by  all  the  productive  enterprises. 
The  more  important  items  included  here  are  taxes,1  automobile  expense 


*It  will  be  noted  that  a  portion  of  taxes  was  charged  to  the  feeding  cattle.   This 
amount  included  a  small  part  of  both  the  personal  and  land  tax  assessed  to  the  farm 


1925]  CATTLE  FEEDING  AND  FARM  MANAGEMENT  221 

incurred  in  operating  the  farm,  fencing,  maintenance  of  the  farmstead 
and  water  system,  and  such  minor  items  as  telephone  service.  The  share 
of  these  expenses  to  be  charged  to  each  productive  enterprise  was  deter- 
mined by  the  proportion  of  man  labor  devoted  to  the  enterprise.  This 
seemed  to  be  as  accurate  and  fair  a  basis  as  any  for  making  this  division. 

5.  Interest. — This  charge  includes  interest  on  the  total  investment 
in  cattle  when  the  cattle  were  put  on  feed,  charged  at  the  rate  usually 
paid  on  borrowed  money. 

6.  Buildings  and  Equipment. — This  annual  cost  includes  deprecia- 
tion, upkeep,   and  interest  on  buildings,  feed-bunks,  hay   racks,   and 
other  miscellaneous  equipment.    Where  such  buildings  and  equipment 
are  shared  with  other  livestock,  the  amount  to  be  charged  to  cattle  is 
estimated  as  accurately  as  possible. 

7.  Miscellaneous  Expenses. — These  include  such  items  as  veteri- 
nary fees,  medicines,  and  personal  expenses  of  the  operator  in  purchas- 
ing arid  selling  cattle. 

8.  Death  Risk. — The  initial  cost  of  animals  that  died  while  on  feed 
is  included  here.  The  feed  consumed  by  cattle  that  died  is  charged  in 
with  the  feed  fed  to  the  remaining  cattle  in  the  lot. 

RELATIVE  IMPORTANCE  OF  DIFFERENT  ITEMS  OF  EXPENSE 

During  the  ten  years  covered  by  this  study,  feed  made  up  85.5 
percent  of  the  feed-lot  costs,  man  labor  4.1  percent,  and  interest  4  per- 
cent. General  farm  expense  made  up  2.9  percent,  horse  labor  1.81  per- 
cent, buildings  .82  percent,  miscellaneous  .21  percent,  and  death  risk, 
.66  percent  (Table  2  and  Fig.  2).  This  represents  a  fairly  normal  dis- 
tribution of  costs. 

Naturally  some  variation  occurred  from  year  to  year  among  the 
different  items  of  expense.  In  1921  feed  made  up  only  80.6  percent  of 
the  costs,  but  in  1918  and  again  in  1919  it  made  up  as  much  as  89  per- 
cent. 

This  difference  may  be  explained  by  the  high  prices  of  feeds  during 
1918  and  1919  followed  by  the  decided  drop  in  1921.  The  other  items 
of  expense  did  not  show  wide  variations  for  the  other  years,  when 
expressed  in  terms  of  percentage,  except  in  two  or  three  instances  noted 
in  the  following  paragraphs. 

The  continued  high  costs  of  labor  and  purchased  materials  in  1921 
and  1922,  in  comparison  with  the  prices  of  farm  products,  were  largely 
responsible  for  the  variation  in  general  farm  expense  and  man  labor. 

and  equipment.  If  all  the  land  tax  had  been  left  out  of  the  charge  against  cattle,  the 
general  farm  expense  would  have  been  reduced  by  about  30  cents  per  steer  or  11  cents 
per  100  pounds  gain.  While  it  might  be  better  practice  to  leave  all  taxes  out  of  the  cost 
of  beef  production  in  instances  where  the  cattle  have  use  of  a  relatively  small  amount 
of  land,  it  will  be  noted  that  this  charge  made  no  appreciable  difference  in  the  results. 
It  is  the  only  charge  made  against  cattle  in  these  data  which  the  authors  felt  might 
be  questioned. 


222 


BULLETIN  No.  261 


[March, 


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19251 


CATTLE  FEEDING  AND  FARM  MANAGEMENT 


223 


Building  expense  shows  a  variation  from  5  to  32  cents  for  100 
pounds  of  gain.  While  building  expenses  advanced  with  prices  of  farm 
products  up  to  and  thru  1919,  thruout  the  latter  part  of  the  ten-year 
period  they  remained  at  a  higher  level  than  most  of  the  other  expenses 
connected  with  cattle  feeding.  Some  of  the  variation  in  this  item,  how- 


19/3     1914-      1915      19/6      19/7      /9/B       19/9      I92/      1922 

HIIIIIMIIIIHI 
Horse  Labor 


m  Interest 

_ g  genera!  I 1 

Labor  ^^Farm.  Exptnao     \ |  Other  Expanses 

FIG.  2. — DISTRIBUTION  OF  COSTS  ON  A  PERCENTAGE  BASIS 
The  different  items  entering  into  the  cost  of  feeding  cattle  for 
market  did  not  vary  widely  from  year  to  year,  on  a  percentage  basis. 

ever,  is  due  to  differences  between  the  amount  and  cost  of  equipment 
on  the  farms  of  new  cooperators  who  were  added  during  the  ten  years 
and  old  cooperators  who  were  dropped. 

In  1916  and  in  1922  more  cattle  died  while  on  feed  than  during 
the  average  seasons,  and  consequently  miscellaneous  livestock  expense 
and  risk  made  up  a  relatively  large  proportion  of  the  total  cost  (see 
Fig.  2,  "other  expense").  In  1916  the  death  risk  amounted  to  59  cents 


224 


BULLETIN  No.  261 


[March, 


for  100  pounds  of  gain  and  in  1922  to  64  cents,  while  the  average  for 
the  whole  period  amounted  only  to  13  cents  (Table  2). 

Even  tho  the  distribution  of  expenses,  on  a  percentage  basis,  re- 
mained nearly  the  same  from  year  to  year,  as  shown  above,  it  is  to  be 
noted  that  the  cost  of  100  pounds  of  gain  varied  widely  (Table  2  and 
Fig.  3).  In  1921  the  cost  of  feed  for  100  pounds  of  gain  was  only  $12.52, 


n 


FIG.  3. — COST  OF  PRODUCING  100  POUNDS  OF  GAIN 
The  average  cost  of  producing   100  pounds  of  gain  varied  from 
$12.63   in  1913   to  $36.76  in    1919,  owing  largely  to  changes  in  the 
prices  of  feed. 

while  in  1919  it  was  $32.64,  or  almost  two  and  one-half  times  as  much. 
This  difference  is  explained  in  part  by  the  price  of  No.  2  corn, 
which  on  January  1,  1921,  was  70  to  78  cents  a  bushel  on  the  Chicago 
market,  and  on  the  same  day  in  1919  was  $1.50  to  $1.62  a  bushel.  Labor 
costs  were  higher  from  1916  to  1919  than  during  the  other  years,  but 
owing  to  the  greatly  increased  cost  of  feed  during  the  war  man  labor 
and  horse  labor  continued  to  make  up  about  the  same  proportion  of 
the  total  cost. 


7925]  CATTLE  FEEDING  AND  FARM  MANAGEMENT  225 

COST  OF  GAIN  VARIES  WITH  SIZE  OF  CATTLE 

That  the  weight  of  cattle  when  put  in  the  feed  lot  has  a  direct 
bearing  on  the  cost  at  which  gains  are  produced  is  shown  by  the  analysis 
of  costs  presented  in  Table  3.  Here  the  cattle  are  divided  into  groups 
according  to  their  initial  weights.  In  one  group  are  those  lots  that 
weighed  less  than  800  pounds,  in  another  those  that  weighed  between 
800  and  1000  pounds,  and  in  another  those  that  weighed  over  1000 
pounds. 

The  cattle  in  the  heaviest  group  consumed  more  feed  in  making 
100  pounds  of  gain  than  did  the  lightest  cattle,  and  feed  made  up  a 
greater  part  of  the  total  costs.  It  took  $8.80  worth  more^eed  to  put 
100  pounds  on  the  heaviest  cattle  than  on  the  lightest.  Since  large  steers 
require  more  feed  for  maintenance  than  do  small  steers,  it  is  to  be 
expected  that  they  would  require  more  feed  for  the  same  gain  in  weight. 

Expenses  for  labor,  both  man  and  horse,  were  slightly  higher  for 
the  heaviest  cattle  than  for  the  light-weight — 38  cents  more  for  man 
labor  and  22  cents  more  for  horse  labor  for  100  pounds  of  gain.  Some 
difference  would  naturally  be  expected  because  of  the  greater  amount  of 
feed  consumed  by  the  larger  cattle.  Also,  the  larger  cattle  were  usually 
fed  during  the  winter,  when  more  labor  is  required  in  caring  for  them. 
The  smaller  cattle  were  on  feed  for  a  longer  period  but  frequently  were 
fed  during  better  weather. 

The  slight  differences  in  general  farm  expenses  and  building  ex- 
pense can  be  attributed  to  differences  on  individual  farms  rather  than 
in  the  weights  of  the  cattle.  This  is  shown  by  the  fact  that  the  relative 
differences  from  farm  to  farm  for  both  these  items  were  greater  than 
the  differences  between  the  different  groups  of  cattle. 

The  interest  charge  varies  with  the  original  costs  of  the  cattle  and 
the  length  of  the  feeding  period.  While  the  light-weight  cattle  cost  less 
per  animal,  the  total  interest  charge  for  them  was  almost  as  high  as  for 
heavy  cattle,  since  they  were  fed  for  a  longer  period.  The  variations  in 
other  items  of  cost — miscellaneous  expenses  and  death  risk — cannot  in 
any  way  be  related  to  the  weights  of  the  cattle  (Tables  3  and  5). 

While  the  total  cost  of  100  pounds  of  gain  increases  as  tthe  initial 
weights  of  the  cattle  increase,  the  credit  for  manure  and  pork  is  larger 
for  the  heavier  cattle.  The  differences  in  these  items  in  the  different 
groups  reduce  substantially  the  differences  in  the  net  cost  of  gains.  While 
the  total  cost  of  producing  100  pounds  of  beef  varied  from  $16.52  with 
the  lighter  cattle  to  $26.17  with  the  he'avier — a  difference  of  $9.65 — the 
net  cost  after  allowing  credit  for  the  manure  and  pork  varied  from 
$13.28  to  $20.23,  lowering  the  difference  from  $9.65  to  $6.95.  The 
medium-weight  group  showed  the  lowest  net  cost  for  100  pounds  of 
gain,  $13.08,  even  tho  an  abnormally  high  death  risk,  which  of  course 
cannot  be  considered  peculiar  to  cattle  of  this  weight,  is  included. 


226 


BULLETIN  No.  261 


[March, 


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228 


BULLETIN  No.  261 


[March, 


The  smaller  credit  for  pork  and  manure,  per  100  pounds  of  gain 
in  weight,  in  the  light-weight  group  is  at  least  partially  accounted  for 
by  the  fact  that  light  cattle  consume  less  feed,  including  corn,  for  every 
pound  of  gain  (see  Table  4).  Also,  it  is  a  generally  recognized  fact  that 
younger  cattle  make  better  use  of  their  feed.  The  lightest  cattle  con- 
sumed a  smaller  proportion  of  concentrates  to  roughage  than  did  the 
other  cattle;  this  was  undoubtedly  due  to  the  method  of  feeding  rather 
than  to  the  class  of  cattle  fed.  It  may  be  noted  that  the  light  cattle  were 
fed  for  a  longer  period  of  time.  Many  feeders  buy  light-weight  cattle 
and  feed  them  for  longer  periods,  getting  a  considerable  part  of  the 
increase  in  weight  thru  growth  rather  than  thru  fattening,  which  makes 
possible  the  use  of  larger  proportions  of  roughages. 

VARIATIONS  IN  COST  ON  DIFFERENT  FARMS 

That  the  ability  of  men  as  cattle  feeders  varies  widely  is  shown  by 
the  wide  variation  in  the  cost  of  producing  100  pounds  of  beef  on  eight 
different  farms  during  the  winter  of  1913-14  (Table  5  and  Fig.  4). 


TABLE  5. — VARIATIONS  IN  COST  OF  FEEDING  BEEF  CATTLE  ON  DIFFERENT  FARMS  DURING 

THE  WINTER  OF  1913-14 


Farm  No  

1 

2 

3 

4 

5 

6 

7 

8 

Number  of  Battle  fed 
Period  fed  (days)  .  .  . 

40 

222 

25 
210 

20 
148 

15 
132 

60 
166 

23 
133 

44 
168 

84 
90 

Initial  weight  per 
steer  (Ibs.)       .... 

918 

836 

758 

920 

991 

1  007 

888 

1  216 

Total  gain  per  steer  . 
Final  wt.  per  steer.  . 

380 
1  298 

366 
1  202 

249 
1  007 

273 
1   193 

267 
1  258 

213 
1  220 

188 
1  076 

125 
1  341 

Initial  cost  per  cwt.  . 
Selling  price  per  cwt. 
Margin       

$7.24 
8.50 
1.26 

$7.02 
8.20 
1  18 

$6.90 
7.90 
1.00 

$6.88 
8.20 
1.32 

$7.35 
8.63 
1.28 

$7.00 
8.15 
1.15 

$7.35 
8.30 
.95 

$7.90 
9.00 
1.10 

Total  cost  of  produc- 
tion per  cwt  

$11  66 

$12  43 

$13.63 

$15.47 

$16.16 

$19.53 

$25.04 

$26.61 

Feed  

10.14 

9.82 

11.00 

13.46 

14.03 

17.41 

20.45 

24.47 

Man  labor  

.33 

.77 

.70 

.50 

.84 

.38 

1.26 

.74 

Horse  labor  
G.  F.  E  

.15 
.26 

.48 
.60 

.51 
.64 

.35 
.40 

.28 
.58 

.33 
.30 

.40 

.74 

'.57 

Interest  

.70 

.62 

.55 

.52 

.32 

.78 

1.12 

.72 

Bldgs.  and  equip. 
Miscellaneous 

.08 

.14 

.23 

.24 

.05 
.06 

.33 

.23 
.06 

.04 

07 

Death  risk 

78 

Profit  or  loss  per 
steer  

$12.60 

$7.30 

$1.98 

$  .65 

$1.10 

$-2.77 

$-14.50 

$-4.25 

These  records  are  selected  for  illustration  because  they  were  not  affected 
by  any  violent  price  changes  and  because  there  are  enough  of  them  to 
provide  a  good  basis  for  comparison. 


1925} 


CATTLE  FEEDING  AND  FARM  MANAGEMENT 


229 


The  cost  of  the  feed  used  in  producing  100  pounds  of  beef  varied 
from  £9.82  on  Farm  No.  2  to  $24.47  on  Farm  No.  8.  The  cost  of  man 
labor  varied  from  33  cents  on  Farm  No.  1  to  $1.26  on  Farm  No.  7,  a 
difference  of  93  cents  for  every  100  pounds  of  gain.  No  horse  labor 
was  used  on  Farm  No.  8,  while  on  Farm  No.  3  horse  labor  cost  51  cents 
for  every  100  pounds  of  gain. 


Mill 


£ 
\fetcf 


Stfan  £a6or 


C<Aer  £jcprnscs 


FIG.  4. — VARIATIONS  ON  DIFFERENT   FARMS  OF  COST  OF 
PRODUCING  100  POUNDS  OF  BEEF 

In   1913-14  the  cost  of  producing   100   pounds  of  beef 
varied  from  $11.66  to  $26.61. 

The  variation  in  buildings  and  equipment  expense  from  5  cents  On 
Farm  No.  5  to  33  cents  on  No.  6  indicates  what  a  wide  difference  there 
may  be  in  this  overhead  expense. 

General  farm  expenses,  interest  on  the  investment,  and  miscel- 
laneous expenses  also  show  considerable  variation  from  farm  to  farm. 

The  margin  between  the  total  cost  of  the  cattle  and  their  selling 
price  varied  from  a  profit  of  $12.60  per  steer  on  the  farm  showing  the 
lowest  cost,  to  a  loss  of  $14.50  per  steer  on  the  farm  having  next. to  the 
highest  cost,  and  a  loss  of  $4.25  per  steer  on  the  farm  having  the  high- 
est cost. 


230 


BULLETIN  No.  261 


[March, 


This  margin  between  the  total  cost  of  producing  100  pounds  of 
beef  and  the  selling  price  must  not  be  confused  with  the  margin  between 
the  price  paid  per  hundred  pounds  for  the  animal  when  put  in  the  feed 
lot  and  the  selling  price,  which  is  an  entirely  different  matter  discussed 
under  the  next  heading. 

THE  NECESSARY  MARGIN  IN  CATTLE  FEEDING 

Finished  steers  usually  sell  for  more  per  hundredweight  than  they 
cost  as  feeders.  This  margin  between  the  purchase  price  and  the  selling 
price  is  necessary  under  normal  conditions,  it  is  generally  agreed,  if  a 
direct  profit  is  to  be  realized  in  feeding  cattle. 


JTZaryin    fleceivecf    -  Perctnt  of  Purchase      Price  per  Cutt 

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FIG.  5. — RELATION  BETWEEN  MARGIN  AND  PROFIT  OR  Loss  PER  STEER 

The  need  of  a  good  margin  between  the  buying  and  selling  price  of  cattle  is 
evident  from  the  above  study  of  the  profit  or  loss  per  steer  in  the  38  lots. 

The  profit  or  loss  per  steer  for  the  different  lots,  and  the  margin 
expressed  as  a  percentage  of  the  purchase  price,  are  shown  in  Fig.  5. 
If,  for  example,  feeder  steers  were  purchased  at  $1  a  hundredweight  and 
sold  at  $7.70,  the  margin  would  be  70  cents,  or  10  percent  of  the  pur- 
chase price. 

While  it  would  seem  from  these  data  that  a  margin  equalling  15 
percent  or  more  of  the  purchase  price  would  be  necessary  for  a  profit 
(Fig.  5),  it  should  be  recognized  that  it  may  be  more  or  less  than  this, 
depending  upon  a  number  of  factors  such  as  the  costs  of  feed,  labor, 
and  materials,  the  weight  of  the  cattle  when  put  on  feed,  the  cost  per 


7925] 


CATTLE  FEEDING  AND  FARM  MANAGEMENT 


231 


hundredweight  when  put  on  feed,  and  the  total  gain  and  the  rate  of 
gain  a  day. 

All  six  lots  of  cattle  which  sold  at  a  margin  less  than  10  percent 
above  the  purchase  price  made  no  profit  (Fig.  5).  Of  16  lots  which 
showed  losses,  the  average  margin  was  only  18.6  percent  of  the  pur- 
chase price,  and  only  three  lots  showing  a  loss  received  over  a  30-percent 
margin.  Of  the  22  lots  which  showed  profits,  the  average  margin  was 
33.6  percent  and  only  5  of  these  lots  received  a  margin  of  less  than 
20  percent. 

As  shown  in  Fig.  5,  while  the  results  do  not  furnish  a  means  of 
determining  how  large  a  margin  is  required,  they  do  serve  to  point  out 
the  importance  of  a  fair  margin  between  the  buying  and  selling  price 
of  feeder  cattle  in  order  to  insure  a  direct  profit  under  normal  conditions. 

CHARACTER  OF  FEED  UTILIZED 

The  ability  of  fattening  cattle  to  utilize  large  amounts  of  roughage 
is  shown  by  the  fact  that  the  cattle  in  these  studies  used  from  50  to  60 
percent  as  much  roughage  other  than  silage  (measured  by  weight)  as 

TABLE  6. — CHARACTER  OF  FEED  UTILIZED  BY  FATTENING  CATTLE  OF  DIFFERENT  WEIGHTS: 
HANCOCK.  COUNTY,  1913-1922 


Feed 

Feed  required  for  100  pounds  gain 

All  cattle 

Cattle 
weighing  less 
than  800 
P9unds 

Cattle 
weighing  from 
800  pounds 
to  1000 
pounds 

Cattle 
weighing 
above  1000 
pounds 

Concentrates  

Ibs. 
984.2 
649.8 

•    547.2 

Ibs. 
607.5 
806.8 
364.0 

Ibs. 
1  071.7 
495.0 

474.7 

Ibs. 
1  341.8 

715.5 
929.7 

Silage.  .  .  . 

Other  roughages  

they  consumed  of  grain  (Table  6).  The  feeds  consumed  by  different 
weights  of  cattle  are  further  analyzed  in  Table  4. 

It  is  not  usually  appreciated  that  a  rotation  of  corn,  corn,  oats,  and 
clover,  with  yields  of  50  bushels  of  corn,  45  bushels  of  oats,  and  two 
tons  of  clover  per  acre,  produces  approximately  1,780  pounds  of  grain 
and  3,062  pounds  of  roughage  per  acre  yearly,  or  a  ratio  of  grain  to 
roughage  of  100  to  174. 

These  roughages  would  mean  little  profit  if  sold,  because  of  the 
limited  market  for  them.  While  under  favorable  conditions  hay  may 
command  a  market  price  that  returns  a  good  profit,  such  crops  are  liable 
to  weather  damage,  and  it  is  frequently  more  profitable  to  feed  them 
on  the  farm  than  to  sell  them.  The  problem  of  soil  management  also 
makes  it  more  profitable  to  utilize  roughages,  especially  those  of  a 


BULLETIN  No.  261  [March, 

leguminous  nature,  on  the  farm,  for  in  this  way  a  considerable  part  of 
the  plant  food  taken  up  in  the  crops  is  returned  to  the  soil  instead  of 
sold  from  the  farm. 

Since  different  rotations  of  crops  found  in  the  corn  belt  normally 
produce  more  roughage  than  concentrates,  and  since  fattening  cattle,  as 
compared  with  other  meat  animals,  consume  a  large  amount  of  rough- 
age, cattle  feeding  would  seem  to  fit  especially  well  into  corn-belt 
agriculture. 

RELATION  OF  CATTLE-FEEDING  COSTS  TO  OTHER  FARM  COSTS 

An  attempt  to  show  the  place  of  the  cattle-feeding  enterprise  in 
the  organization  of  the  farm  should  first  of  all  take  into  account  avail- 
able feeds,  since  feed  normally  makes  up  well  over  80  percent  of  the 
cost  of  fattening  beef  steers  (Table  2).  Other  conditions  which  must  be 
considered  are  the  available  man  and  horse  labor,  the  equipment  already 
on  the  farm,  and  the  ability  of  the  farmer. 

While  in  this  study  each  cost  item  was  valued  at  average  farm 
prices,  on  a  particular  farm  some  of  the  items  may  not  represent  as 
large  an  actual  cost  as  on  other  farms;  that  is,  cattle  feeding  may  reduce 
costs  of  other  products  or  utilize  labor  or  feed  that  otherwise  would  not 
be  used  to  the  best  advantage. 

On  farms  that  produce  large  amounts  of  corn  for  sale,  the  feeding 
of  beef  cattle  fits  into  the  farming  system  in  a  more  advantageous  way 
than  any  other  livestock  enterprise  except  perhaps  the  feeding  of  sheep. 
Feeder  cattle  can  be  purchased  after  the  rush  of  crop  work  is  completed, 
fed  during  the  winter  months,  and  sold  in  the  spring  before  the  heaviest 
demand  for  labor.  Also,  cattle  fed.  during  the  winter  do  not  take  up 
land  in  a  way  that  reduces  the  crop  acreage. 

In  estimating  the  availability  of  feed  one  should  consider  both  the 
cropping  system  and  the  amount  of  untillable  land  that  can  be  used 
only  for  pasture.  If  untillable  land  is  to  be  utilized,  the  farm  is  suited 
for  grazing  stocker  cattle  or  sheep,  raising  beef  calves,  dairying,  or 
feeding  cattle  on  pasture.  If  the  farm  is  composed  entirely  of  tillable 
land  the  problem  is  little  different,  except  that  the  pasturing  of  livestock 
on  that  particular  farm  is  not  a  necessity  if  feed-lot  production  fills  the 
need  for  livestock  in  a  safe  system  of  farming. 

All  salable  feeds  consumed  by  cattle  were  charged  at  farm  prices 
in  these  studies.  Values  also  were  placed  on  roughages  which  could  not 
have  been  sold  advantageously.  Cattle  feeding  provides  a  method  of 
marketing  such  roughages  and  at  the  same  time  returns  to  the  soil  a 
large  part  of  the  plant  food  materials  removed  by  the  crops.  The  credit 
assumed  for  manure  in  these  data  was  a  conservative  estimate;  the  final 
value  of  manure  can  best  be  determined  in  terms  of  long-time  increases, 
in  yields.  Also,  corn  and  other  grains  which  have  been  damaged  by 
unfavorable  weather  can  usually  be  marketed  to  better  advantage  in  the: 
form  of  livestock  and  livestock  products  than  when  sold  directly. 


1925}  CATTLE  FEEDING  AND  FARM  MANAGEMENT  233 

If  all  the  man  labor  used  in  fattening  a  carload  of  cattle  were  hired, 
it  would  amount  to  a  considerable  charge,  but  in  this  area  farmers  fre- 
quently feed  cattle  without  employing  other  than  family  labor.  Winter 
labor  created  by  cattle  feeding  also  may  help  provide  all-year  employ- 
ment and  serve  as  a  means  of  retaining  hired  labor  of  a  good  grade. 
The  corn-belt  farmer  who  does  not  have  livestock  usually  has  little 
opportunity  to  use  labor  productively  during  the  winter  months.  The 
labor  available  at  that  time  is  often  sufficient  to  feed  a  carload  or  more 
of  cattle;  hence  cattle  feeding  may  be  considered  an  advantageous  means 
of  marketing  labor. 

On  many  farms  the  cost  of  horse  labor  used  in  feeding  cattle  is  to 
a  large  extent  a  gain  from  the  standpoint  of  the  whole  farm.  Frequently 
there  is  little  labor  for  horses  on  corn-belt  farms  during  the  winter 
unless  they  are  used  in  caring  for  livestock.  The  cost  of  keeping  horses 
is  in  the  main  a  fixed  expense  which  must  be  borne  by  all  of  the  labor 
the  horse  performs.  Hence  the  horse  labor  used  for  cattle  may  be  looked 
upon  as  a  reduction  of  the  horse-labor  expense  which  would  have  to  be 
borne  by  other  productive  enterprises  if  cattle  were  not  fed,  or  as  a 
means  of  creating  a  market  for  horse  labor  at  a  fair  rate  per  hour. 

If  cattle  were  not  fed  a  considerable  part  of  the  farm  crops,  both 
man  and  horse  labor  would  be  used  in  marketing  that  part  of  the  crops. 
If  this  plan  were  followed  on  a  particular  farm  during  the  winter  season, 
it  would  be  accomplished  mainly  by  exchange  labor,  which  would 
have  to  be  repaid  at  various  times  of  the  year.  Some  exchange  labor  in 
marketing  crops,  especially  corn,  must  be  repaid  during  the  growing 
season,  when  farm  labor  should  be  most  productive.  Consequently  it 
would  seem  that  direct  marketing  of  crops  adds  materially  to  farm  labor 
costs  since  it  does  not  utilize  available  seasonal  labor  as  effectively 
as  cattle  feeding. 

General,  or  over-head,  farm  expenses  must  be  proportioned  in  some 
way  to  the  various  productive  enterprises.  In  the  main  these  expenses 
will  be  realized  whether  or  not  cattle  are  fed.  When  cattle  feeding  is 
introduced  and  a  portion  of  general  expenses  is  charged  to  cattle,  the 
amount  of  expense  thus  shifted  tends  to  increase  the  profits  of  the  other 
enterprises.  However,  the  usual  cost-accounting  procedure  does  not 
credit  the  cattle  for  such  resulting  advantages. 

Most  of  the  other  items  of  expense  charged  to  cattle  feeding  in  this 
study  were  directly  due  to  that  enterprise. 

By  carefully  analyzing  the  Organization  of  the  entire  farm,  it  be- 
comes clear  that  the  separate  enterprises  of  the  farm  are  largely  depend- 
ent on  each  other  for  their  success;  in  fact,  that  the  efficiency  or  profit- 
ableness with  which  the  farm  unit  is  operated  is  more  dependent  upon 
the  interrelation  of  the  separate  enterprises  than  upon  the  management 
of  any  single  one. 


234 


BULLETIN  No.  261 


[March, 


PART  II— THE  PLACE  OF  CATTLE  FEEDING 
ON  A  CORN-BELT  FARM 

Whether  cattle  feeding  will  fit  profitably  into  a  system  of  farming 
is  dependent  upon  many  factors,  as  was  shown  by  the  preceding  discus- 
sion of  costs.  The  most  profitable  system  of  farming  for  any  given  farm 
depends  upon  conditions  which  may  be  peculiar  to  that  farm,  and  the 
advantages  realized  from  a  particular  enterprise  may  not  be  realized  to 
the  same  extent  or  in  the  same  way  on  other  farms.  Each  farm  then 
becomes  an  individual  problem. 

The  following  analysis  of  one  of  the  farms  in  this  study  is  offered 
as  an  illustration  of  the  way  in  which  the  beef-cattle  enterprise  may  be 
analyzed  so  as  to  show  just  what  its  relation  is  to  the  farm  as  a  whole. 
That  is,  having  determined  the  direct  profit  from  the  enterprise,  we  may 
then  ask  what  is  the  indirect  profit  as  shown  by  the  effect  of  the  enter- 
prise in  reducing  the  cost  of  other  enterprises,  and  what  are  the  benefits 
realized  in  the  organization  and  operation  of  the  farm  as  a  whole. 

The  farm  selected  comprized  295  acres,  all  of  which  could  be  culti- 
vated, and  records  on  it  were  secured  for  a  continuous  seven-year  period. 

TABLE  7. — RESULTS  OF  SEVEN  YEARS  OF  CATTLE  FEEDING  ON  THE  SAME  FARM  IN 
HANCOCK  COUNTY,  ILLINOIS,  1913-1919 

395  cattle  fed 


Average  per  year 
for  the  seven-year  period 

Average  per  steer 

Initial  weight  of  cattle  (Ibs.).  .  .  . 
Total  gain  (Ibs.)  .... 

58  116 
14  280 
72  396 

1  030 

253 
1  283 

Final  weight  (Ibs.)  

Initial  cost  

$4  616.09 

$  81.84 

Operating  costs  in  feed  lot.  . 

$2  812.11 
146.06 
71.84 
68.77 
107.19 
19.47 
14.68 
11.05 

$3  251.17 

$49.86 
2.59 
1.27 
1.22 
1.90 
.35 
.26 
.19 

$  57.64 

Feed  

Man  labor  

Horse  labor  

General  farm  expense 

Interest  

Buildings  and  equipment.  .  .  . 
Miscellaneous  

Death  risk  

Marketing  expense  .   .  . 

$     170.66 

$    3.02 

Total  cost  at  date  of  selling  

$8  037.92 

$142.50 

Total  credit  

$    319.04 
481.65 

$     800.69 

$  5.65 
8.54 

$  14.19 

Manure  credit  

Pork  credit  

Net  cost  

$7  237.23 
7  527.86 

$290.63 

$128.31 

133.47 

$    5.16 

Sale  price  

Profit  

/P25]  CATTLE  FEEDING  AND  FARM  MANAGEMENT  235 

It  is  not  considered  ideal,  but  is  typical  of  many  corn-belt  farms.   From 
40  to  79  cattle  were  fed  annually;  a  total  of  395  during  the  seven  years. 

Practically  all  the  cattle  were  put  on  feed  in  October  or  November 
at  an  average  weight  of  1,030  pounds  and  were  sold  in  March,  April, 
or  May  at  an  average  weight  of  1,283  pounds,  showing  an  average  gain 
of  253  pounds.  The  cattle  were  fed  an  average  of  156  days. 

The  initial  cost  of  steers  per  head  was  $81.84,  the  operating  costs 
while  in  the  feed  lot  were  $57.64,  and  the  marketing  expense  was  $3.02, 
making  the  gross  cost  $142.50  (Table  7).  A  credit  of  $5.65  for  manure* 
and  $8.54  for  pork  left  a  net  cost  of  $128.31.  With  a  selling  price  of 
$133.47,  there  was  a  net  profit  of  $5.16  per  steer.  The  operator  then 
realized  a  direct  profit  of  $290.63  a  year  as  an  average. 

When,  however,  all  less-direct  profit  is  taken  into  consideration,  the 
value  of  the  enterprise  to  this  particular  farm  proved  to  be  $827.65 
yearly,  or  two  and  one-half  times  as  much  as  shown  above.  This  profit, 
tho  less  obvious,  is  just  as  real  as  the  "direct"  profit  and  is  the  amount 
one  should  take  into  consideration  when  deciding  whether  or  not  the 
enterprise  is  a  desirable  one  for  his  farm. 

How  the  total  value  of  the  cattle  enterprise  to  the  farm  was  deter- 
mined is  shown-in  the  following  pages  from  several  standpoints:  namely, 
the  utilization  of  farm  raised  crops;  the  utilization  of  available  man  and 
horse  labor;  the  lowering  of  the  amount  of  general  expense  charged  to 
other  enterprises;  the  effect  upon  the  maintenance  of  soil  fertility;  and 
finally  by  way  of  summary  the  effect  upon  the  farm  as  a  whole,  expressed 
in  dollars  and  cents,  if  the  enterprise  were  removed  from  the  farm. 

CATTLE  FEEDING  UTILIZES  FARM-RAISED  CROPS 

As  an  average  for  the  seven-year  period,  $2,812.11  worth  of  feed 
was  consumed  annually  by  beef  cattle.  This  represented  $2,464.48  worth 
of  farm-raised  concentrates  and  purchased  feeds  and  $347.63  worth  of 
farm-raised  roughages.  While  some  of  the  roughages  had  a  sale  value, 
a  large  part  of  this  feed  would  have  been  returned  directly  to  the  land 
if  cattle  had  not  been  fed.  Expressed  in  terms  of  weight,  a  total  of 
242,620  pounds  of  roughage  and  172,073  pounds  of  grain  was  utilized 
by  the  cattle,  or  in  the  ratio  of  roughage  to  grain  of  141  to  100  (Table  8). 
The  importance  of  this  utilization  of  roughage  is  again  emphasized  by 
comparing  the  total  production  of  roughages  with  the  total  production 
of  crops,  which  gives  a  ratio  of  152  to  100. 

Cattle  and  horses  were  the  only  classes  of  livestock  that  consumed 
a  large  proportion  of  roughages  as  compared  with  grain.  While  the 
horses  used  a  larger  proportion  than  the  cattle — a  ratio  of  201  to  100  as 
compared  with  141  to  100 — the  number  of  horses  kept  to  operate  the 
average  corn-belt  farm  is  not  large  enough  to  make  it  possible  to  use 
in  that  way  any  large  part  of  the  roughages  grown. 


236 


BULLETIN  No.  261 


[March, 


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7925]  CATTLE  FEEDING  AND  FARM  MANAGEMENT  237 

An  average  of  $100  worth  of  roughage  per  year  charged  to  cattle 
may  well  be  considered  to  have  had  no  sale  value;  oat  and  rye  straw, 
clover  and  soybean  chaff,  corn  stover,  and  pasture  from  second  growth 
on  fields  would  not  have  been  sold.  Also,  a  portion  of  the  clover  hay 
was  clover  cut  following  rye,  which  was  not  good  marketable  hay.  Some 
of  the  soybean  hay  was  also  hardly  a  marketable  product.  Altho  some 
of  this  feed  might  have  commanded  the  sale  value  assigned  to  it,  it  was 
not  the  usual  practice  on  this  particular  farm  to  sell  such  roughages  as 
were  not  used  in  the  cattle-feeding  operations. 

In  so  far  as  cattle  consume  roughages  which  otherwise  would  not 
have  been  sold,  they  provide  a  means  of  marketing  such  roughage  and 
thereby  increase  the  farm  income.  Normally  such  roughage  would  be 
charged  to  cattle  at  the  price  it  would  command  in  the  market.  How- 
ever, from  the  standpoint  of  the  farm  that  would  not  market  such 
roughage  except  thru  feeding  it  to  livestock,  the  value  of  such  roughage 
should  not  necessarily  be  considered  a  charge  against  the  cattle. 

Moreover,  the  fact  that  a  farm  produces  a  large  quantity  of  rough- 
age does  not  mean  that  all  such  roughage  necessarily  would  command 
the  market  price  assigned  to  it.  There  is  a  limited  market  demand  for 
cheap  roughage  feed,  and  if  every  farmer  who  ordinarily  sells  grain 
should  attempt  to  sell  a  large  part  of  the  roughage  produced  on  his 
farm,  the  prices  of  such  feeds  would  fall  far  short  of  paying  the  actual 
cash  expense  of  marketing  them. 

MAKES  USE  OF  LABOR  THAT  OFTEN  Is  WASTED  • 

The  average  charge  for  the  man  and  horse  labor  devoted  to  cattle 
feeding  was  $217.90.  This  amount  represents  771  hours  of  man  labor 
and  911  hours  of  horse  labor  used  from.  October  to  May  inclusive. 
(Table  9  and  Figs.  6  and  7.) 

If  cattle  had  not  been  fed,  it  is  probable  that  much  of  this  labor 
would  have  been  wasted  unless  some  other  livestock  had  been  kept,  for 
thruout  the  winter  sufficient  family  labor  was  available  to  care  for  the 
cattle  and  there  was  comparatively  little  other  work  for  the  horses.  By 
the  feeding  of  cattle,  this  labor  was  made  productive  and  at  the  same 
time  the  enterprise  added  very  little  to  the  peak  load  of  labor  during 
the  crop  season. 

Rates  for  man  labor  were  determined  monthly  and  each  enterprise 
charged  monthly  with  its  share  of  laj^or.  Cattle  feeding,  in  providing  a 
market  for  $146.06  worth  of  man  labor,  used  over  73  percent  of  this 
labor  during  December,  January,  February,  and  March,  when  there 
were  no  heavy  labor  demands  for  other  productive  work.  In  fact,  only 
14  percent  of  the  man  labor  required  by  cattle  feeding  came  at  the  time 
of  the  heavy  spring  crop  work.  Even  this  situation  might  have  been 
avoided  by  earlier  marketing  of  the  cattle,  altho  the  fact  that  cattle 
prices  are  ordinarily  higher  in  April  and  May  justified  the  holding  of 
the  cattle  past  the  beginning  of  the  cropping  season,  especially  since 


238 


BULLETIN  No.  261 


[March, 


less  than  6  percent  of  the  total  labor  expended  on  the  farm  during  those 
months  was  required  in  feeding  cattle. 

Cattle  feeding  results  in  a  more  distinct  advantage  in  the  case  of 
horse  labor  costs  than  in  the  use  of  man  labor.  A  large  part  of  the 
charge  of  $71.84  for  the  911  hours  of  horse  labor  used  was  a  clear  gain 
to  the  farm.  About  80  percent  of  this  labor  was  required  during  Decem- 
ber, January,  February,  and  March,  or  the  third  of  the  year  in  which 
only  22  percent  of  the  total  amount  of  horse  labor  was  used.  The  horse 
labor  used  for  cattle  was  for  feeding  and  bedding.  This  work  was  not 
heavy  at  any  time  and  added  little  to  the  cost  of  maintaining  the  horses. 
The  total  cost  of  $71.84  for  horse  labor  charged  to  cattle  may  therefore 
be  considered  largely  profit.  The  creating  of  a  use  for  911  hours  of 
horse  labor  may  be  looked  upon  to  a  large  extent  as  either  an  income 
due  to  marketing  that  amount  of  horse  labor  at  a  fair  rate,  or  as  a 
reduction  of  a  like  amount  in  the  regular  horse  labor  cost  which  would 
have  been  borne  by  the  other  enterprises  if  cattle  had  not  been  fed. 

The  use  of  labor  in  feeding  cattle  can  be  considered  an  advantage 
when  the  enterprise  does  not  interfere  with  those  parts  of  the  farm 
business  which  require  the  largest  amounts  of  labor.  In  this  section  the 
largest  amount  of  labor  is  needed  for  spring  crop  work.  The  cattle- 
feeding  enterprise  as  organized  on  this  particular  farm  undoubtedly 
did  provide  a  needed  market  for  available  man  and  horse  labor. 


Man  JLai>or 


on  £ntire 


FIG.  6. — DISTRIBUTION  OF  MAN  LABOR  ON  ONE  FARM 

BY  MONTHS:    AVERAGE  OF  SEVEN  YEARS 

The  heaviest  demands  for  man  labor  for  the  feeding  of  beef  cattle 
came  during  the  months  when  the  other  enterprises  required  the  least  labor. 


7925] 


CATTLE  FEEDING  AND  FARM  MANAGEMENT 


239 


TABLE  9. — MONTHLY  DISTRIBUTION  OF  MAN  AND  HORSE  LABOR  DEVOTED  TO  BEEF 
CATTLE  AND  OTHER  WORK  OVER  A  SEVEN-YEAR  PERIOD  (1913-1919) 
ON  A  HANCOCK  COUNTY  FARM 


Month 

Hours  of  man  labor 

Hours  of  horse  labor 

Beef-  cattle 
work,  56.4 
steers 

All  work 
except  for 
beef  cattle 

All  farm 
work 

Beef-  cattle 
work,  56.4 
steers 

All  work 
except  for 
beef  cattle 

All  farm 
work 

January  

164 
144 
132 
79 
31 

347 
352 
586 
837 
969 
1  133 
1  370 
889 
933 
802 
747 
519 

511 
496 
718 
916 
1  000 
1  133 
1  370 
889 
934 
815 
825 
648 

202 
178 
179 
77 
30 

"7 
91 
147 

293 
250 
942 
1  715 
1  798 
1  632 
1  316 
1  024 
1  137 
1  267 
1  380 
766 

495 
428 
1  121 
1  792 
1  828 
1  632 
1  316 
1  024 
1  137 
1  274 
1  471 
913 

February  

March  

April  

May.  . 

June  

July  

August  

September  

1 

13 

78 
129 

October   

November  

December  

FIG.  7. — DISTRIBUTION  OF  HORSE  LABOR  ON  ONE  FARM 
BY  MONTHS:   AVERAGE  OF  SEVEN  YEARS 

The  feeding  of  beef  cattle  provides  winter  use  for  horses  when 
there  is  little  other  productive  work  for  them. 


240  BULLETIN  No.  261  [March, 

REDUCES  GENERAL  FARM  EXPENSE  CHARGED  TO  OTHER  ENTERPRISES 

The  item  of  general  farm  expense  charged  to  cattle  amounted  to  a 
sum  nearly  equal  to  the  cost  of  horse  labor,  an  average  of  $68.77  a  year. 
As  stated  on  page  220,  the  total  general  farm  expense  is  charged  against 
the  different  productive  enterprises  in  proportion  to  the  amount  of  man 
labor  expended  on  each  enterprise.  Since  general  farm  expenses  are 
realized  in  large  part  regardless  of  what  enterprises  are  included  in  the 
business,  the  charging  of  a  portion  of  the  general  farm  expenses  to  beef 
cattle  relieves  the  other  productive  enterprises  of  a  large  part  of  these 
costs. 

The  other  items  of  expense  on  this  farm,  including  death  risks, 
building  expense,  interest,  and  miscellaneous  expense,  represent  actual 
expense  chargeable  directly  to  cattle  feeding. 

HELPS  TO  MAINTAIN  SOIL  FERTILITY 

The  maintenance  or  the  improvement  of  the  soil  thru  livestock 
production  is  an  advantage  which  would  hardly  have  been  recognized 
thirty  to  forty  years  ago.  Now,  however,  the  reduced  productivity  of 
land  in  most  parts  of  the  corn  belt  warrants  careful  attention. 

The  value  of  farm  manure  is  measured  most  accurately  in 
terms  of  increases  in  crop  yields.  On  the  particular  farm  studied  it  was 
impossible  to  measure  accurately  increases  in  yields  following  the  appli- 
cation of  farm  manure,  because  cattle  feeding  had  been  a  regular  prac- 
tice for  over  twenty  years  and  accurate  crop  records  were  not  available 
over  so  long  a  period.  However,  the  following  statement  of  the  owner, 
who  began  operating  the  farm  forty-five  years  ago,  is  a  real  contribu- 
tion. "Twenty-five  years  ago  it  was  noted  on  this  farm  that  the  soil  was 
becoming  impoverished.  Crop  yields  and  the  physical  condition  of  the 
soil  were  becoming  worse  year  by  year,  even  tho  a  rotation  of  corn, 
corn,  oats  and  clover  was  followed.  After  the  feeding  of  cattle  was  well 
started,  yields  with  the  same  rotation  were  increased  from  15  to  25 
percent." 

Since  we  have  no  records  from  this  farm  with  which  to  measure 
the  value  of  the  manure  in  terms  of  increased  crop  yields,  we  may 
measure  it  by  applying  a  conservative  money  value  directly  to  it.  At 
75  cents  a  ton,  the  value  of  the  manure  produced  by  the  cattle  on  this 
farm  amounted  to  $319.04  yearly  (Table  7). 

That  this  credit  is  conservative  is  shown  by  actual  increases  in 
yields  secured  from  the  use  of  farm  manure  in  field  experiments  in 
Hancock  county.  The  following  results  are  reported  from  the  Univer- 
sity field  at  Carthage.  For  the  seven-year  period  1915-1921  inclusive 
(the  same  time  during  which  the  cost-of-production  data  were  being 
secured  in  Hancock  county),  manure  applied  at  the  average  rate  of 
1.74  tons  a  year  gave  increases  in  crop  yields  amounting  to  4.2  bushels 


1925]  CATTLE  FEEDING  AND  FARM  MANAGEMENT  241 

of  wheat,  6.3  bushels  of  corn,  3.8  bushels  of  oats,  and  a  slight  increase 
in  the  yields  of  clover  and  other  legume  hay.  These  increases  valued 
at  current  prices  were  worth  about  $1.40  for  each  ton  of  manure  applied. 
After  giving  the  cattle  a  credit  of  75  cents  a  ton  for  the  manure  pro- 
duced, a  difference  of  65  cents  a  ton  is  left  to  pay  for  hauling  and 
spreading  the  manure,  which  would  seem  to  be  an  ample  allowance  to 
cover  actual  expenses.  It  is  apparent,  therefore,  that  the  credit  of 
$319.04  allowed  the  cattle  for  manure  is  supported  by  experimental 
evidence.1 

EFFECT  UPON  FARM  AS  A  WHOLE  IF  CATTLE-FEEDING  ENTERPRISE 

WERE  REMOVED 

It  is  clear  from  the  foregoing  that  the  increase  in  the  farm  income 
due  to  cattle  feeding  is  a  cumulative  increase  resulting  from  the  inter- 
relation of  cattle  feeding  with  the  other  farm  enterprises.  It  has  been 
shown  that  cattle  feeding  utilized  feeds  advantageously,  provided  profit- 
able employment  for  available  man  and  horse  labor  at  a  season  when 
the  labor  was  not  needed  for  other  productive  enterprises,  bore  a  share 
of  the  over-head  expenses  which  otherwise  would  have  been  borne  by 
the  other  enterprises,  and  resulted  in  considerable  increases  in  crop 
yields.  One  way  of  measuring  the  cumulative  value  of  these  advantages 
is  to  contrast  the  financial  statement  of  the  entire  farm  business  with  a 
statement  showing  the  cattle-feeding  enterprise  removed;  this  can  be 
done  fairly  accurately  for  a  given  farm  on  which  detailed  cost  informa- 
tion is  available. 

In  removing  the  record  of  the  cattle-feeding  enterprise  from  the 
financial  account  of  this  farm  (Table  10),  the  receipts  were  reduced  by 
the  selling  value  of  the  cattle  and  by  the  value  of  pork  produced  and 
accredited  to  cattle;  and  the  sale  of  crops  was  increased  by  the  value  of 
the  salable  crops  fed  to  beef  cattle,  figured  at  the  local  market  price. 
The  farm  expenses  were  lessened  by  the  initial  cost  of  the  cattle,  the 
value  of  the  feed  purchased  and  fed  to  cattle,  the  annual  cost  of  equip- 
ment .chargeable  to  cattle,  the  interest  on  the  added  investment  in  cattle 
and  equipment,  and  the  share  of  other  expenses  which  would  be  charged 
to  the  cattle. 

This  comparison  shows  the  cattle-feeding  enterprise  to  have  added 
$508.61  to  the  family  income.  The  additional  credit  of  $319.04  for  the 
value  of  plant  food  returned  to  the  soil  gives  a  total  credit  of  $827.65. 
From  the  standpoint  of  the  farm  as  a  whole,  the  cattle-feeding  enter- 
prise added  this  sum  to  the  net  income  realized  from  the  farm,  whereas 
the  enterprise  analyzed  separately  showed  a  profit  of  only  $290.63,  or 

further  evidence  that  the  credit  allowed  the  cattle  for  the  manure  produced  is 
conservative  is  found  in  Bulletin  209  of  this  Station:  Fertilizing  Constituents  Excreted 
by  Two-Year-Old  Steers,  by  H.  S.  Grindley,  H.  W.  Mumford,  A.  D.  Emmett,  and 
Sleeter  Bull.  1918. 


242 


BULLETIN  No.  261 


[March, 


TABLE  10.- 


-INCREASE  IN  SlZE  OF  FARM  BUSINESS  DUE  TO  CATTLE-FEEDING  ENTERPRISE 
AVERAGE  OF  SEVEN-YEAR  PERIOD  ON  THE  SAME  FARM 


Farm  income  with  cattle 

Farm  income  without 
cattle 

Receipts  and  net  increases  

$  5  986.76 
7  546.57 
481.65 
5  319.43 
122.61 

$19  457.02 

$  8  466.96 

$  13  909.00 

Crops  . 

Feeding  cattle  

Pork  credited  to  cattle.  . 

Sale  of  other  livestock  

5  319.43 
122.61 

Miscellaneous  

Cash  expenses  and  depreciation  . 
Grain,  feed,  and  seed  bought. 
Livestock  other  than  feeders  . 
Feeding  cattle.  .  .  . 

$  971.51 
694.24 
4  627.14 
288.80 
420.77 
471.18 
648.12 

$  8  121.76 

$  639.11 
694.24 

$  3  186.55 

Threshing,  baling,  etc. 

347.28 
420.77 
451.71 
633.44 

Cash  labor  hired  

Upkeep  and  depreciation  .... 
Taxes  and  miscellaneous 

Net  income  

$11  335.26 
2  354.36 
8  980.90 

$10  722.45 
2  250.16 
8  472.29 

Interest  on  investment  

Family  income  

Increase  in  family  income  

$      508.61 
319.04 

Value  of  added  fertility  

Total  credit  due  to  cattle 
feeding  

$      827.65 

little  more  than  a  third  as  large  a  credit.  The  following  statement  of 
the  owner  in  regard  to  the  advantages  of  cattle  feeding-  to  the  farm  as 
a  whole  may  well  be  added. 

"I  look  back  upon  the  years  spent  in  buying  and  feeding  cattle  as 
the  best  years  of  my  life,  that  is,  from  the  standpoint  of  using  labor 
advantageously  and  in  satisfying  the  love  of  gain." 

VALUE  OF  COST  ACCOUNTS  IN  ANALYZING  THE 
FARM  BUSINESS 

The  analysis  just  given  illustrates  the  primary  purpose  of  cost 
accounting,  which  is  to  show  how  farms  may  be  organized  on  a  more 
profitable  basis.  Detailed  cost-accounting  data  make  possible  a  careful 
analysis  of  the  efficiency  of  any  part  of  the  farm  business,  both  when 
the  enterprise  is  considered  separately  and  when  it  is  considered  in  its 
relation  to  the  farm  business  as  a  whole. 

The  economic  relationship  of  any  farm  enterprise  to  the  remainder 
of  the  farm  business  is  quite  as  important  as  the  study  of  the  efficiency 
of  the. separate  enterprise,  as  has  been  shown  clearly  in  the  foregoing; 
and  while  productive  enterprises  other  than  the  feeding  of  beef  cattle 
might  lend  themselves  to  a  similar  analysis,  hardly  any  other  phase  of 
farm  production  has  the  same  complementary  relationship  with  other 


1925~\  CATTLE  FEEDING  AND  FARM  MANAGEMENT  243 

parts  of  the  farm  business.  The  beef-cattle  enterprise  is  favored  by  the 
fact  that  crop  enterprises  compete  with  each  other  for  labor  at  the  season 
of  the  year  when  labor  is  in  greatest  demand,  and  that  other  livestock 
enterprises,  except  the  feeding  of  sheep,  the  grazing  of  beef  cattle,  and 
possibly  winter  dairying,  are  subject  to  all-year  labor  demands  and  re- 
quire a  larger  proportion  of  readily  salable  grain  crops.  Furthermore,  the 
cattle-feeding  enterprise,  which  does  not  directly  require  much  land 
area,  can  be  added  to  the  farm  business  in  a  surplus  corn-producing 
area  without  displacing  some  other  enterprise  either  wholly  or  in  part. 
This  adds  volume  to  the  farm  business  without  requiring  increased 
acreage.  This  is  important  in  a  section  where  land  makes  up  a  large 
part  of  the  total  farm  investment. 

Finally,  this  analysis  helps  to  explain  the  belief  of  many  cattle 
feeders  that  while  over  a  period  of  years  there  seems  to  be  compara- 
tively little  direct  profit  in  feeding  cattle,  the  enterprise  nevertheless 
adds  materially  to  the  net  income  of  the  farm  as  a  whole.  This  is  due 
largely  to  the  fact  that  it  utilizes  non-marketable  or  low-grade  feed, 
provides  employment  for  available  man  and  horse  labor,  shares  a  part 
of  the  overhead  costs  of  the  farm,  and  helps  maintain  the  productivity 
of  the  land. 


UNIVERSITY  OF  ILLINOIS-URBANA 


